Canada Expands Economic Sanctions Against Russia

Since March, 2014,
Canada has imposed economic sanctions against Russia pursuant to the Special
Economic Measures (Russia) Regulations (“the Regulations”).

The Regulations
impose an asset freeze and dealings prohibition on designated persons, which
include both individuals and entities.

The Regulations
also impose restrictions on the financial sector. Specifically, they prohibit
dealings in certain types of debt and equity financing transactions.

The Regulations
also prohibit the export, sale, supply or shipping of certain goods to Russia for
use in offshore oil, shale oil or Arctic oil exploration and production. This
includes a ban on the provision of any financial, technical or other services
related to the goods subject to this prohibition.

Between March 17,
2014 and March 18, 2016, the Regulations were expanded 13 times. The
Regulations then remained untouched for almost 3 years. However, on March
15, 2019, Canada added 25 individuals and 14 entities as designated persons.
The result is that Canada now imposes an asset freeze and dealings prohibition on
118 individuals and 68 entities.

The imposition of economic sanctions does not
mean that Canadians must cease business with Russia. On-going business is
permitted so long as it does not involve, directly or indirectly, a designated person.
The expansion of economic sanctions does, however, impose on Canadians
conducting business with Russia further obligations to scrutinize ongoing
business transactions to ensure compliance.

The lawyers at Tereposky & DeRose have
significant experience in the design and implementation of sanctions-related
compliance programs, including policies, procedures, employee training, and
internal control mechanisms. They also regularly assist both Canadian and
international businesses, financial institutions, and individuals with internal
investigations when “red flags” appear and provide advice on compliance in these
areas. Where breaches have occurred, they have worked closely with their
clients in making voluntary disclosures and in engaging with the ensuing
investigations conducted by the RCMP and Global Affairs Canada.

If you would like to discuss any aspect of the
Canadian sanctions regime, contact Vince DeRose or Jennifer Radford at: